This Week's Reverse Mortgage Rates: July 14, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning July 14, 2009.

APR:

HECM CMT 300: 3.46

HECM CMT 325: 3.71

HECM CMT 350: 3.96

HECM LIBOR 250: 2.793

HECM LIBOR 275: 3.043

HECM LIBOR 300: 3.293

Expected Rates:

HECM CMT 300: 6.42

HECM CMT 325: 6.67

HECM CMT 350: 6.92

HECM LIBOR 250: 6.10

HECM LIBOR 275: 6.35

HECM LIBOR 300: 6.60

Both the HECM Libor and the HECM CMT saw significant drops in Expected Rates and APRs this week. Hopefully the rates will continue to fall, as they have the last few weeks.

This Week's Reverse Mortgage Rates: July 7, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning July 7, 2009.

APR:

HECM CMT 300: 3.53

HECM CMT 325: 3.78

HECM CMT 350: 4.03

HECM LIBOR 250: 2.801

HECM LIBOR 275: 3.051

HECM LIBOR 300: 3.301

Expected Rates:

HECM CMT 300: 6.53

HECM CMT 325: 6.78

HECM CMT 350: 7.03

HECM LIBOR 250: 6.25

HECM LIBOR 275: 6.50

HECM LIBOR 300: 6.75

Both the HECM Libor and the HECM CMT saw significant drops in Expected Rates this week, although the APR of the HECM CMT rose.

This Week's Reverse Mortgage Rates: June 30, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning June 30, 2009.

APR:

HECM 300: 3.48

HECM 325: 3.73

HECM 350: 3.98

HECM LIBOR 250: 2.810

HECM LIBOR 275: 3.060

HECM LIBOR 300: 3.310

Expected Rates:

HECM 300: 6.63

HECM 325: 6.88

HECM 350: 7.13

HECM LIBOR 250: 6.39

HECM LIBOR 275: 6.64

HECM LIBOR 300: 6.89

Both the HECM Libor and the HECM CMT saw significant drops in Expected Rates this week, as well as declines in their APRs.

This Week's Reverse Mortgage Rates: June 23, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning June 23, 2009.

APR:

HECM 300: 3.51

HECM 325: 3.76

HECM 350: 4.01

HECM LIBOR 250: 2.817

HECM LIBOR 275: 3.067

HECM LIBOR 300: 3.317

Expected Rates:

HECM 300: 6.75

HECM 325: 7.00

HECM 350: 7.25

HECM LIBOR 250: 6.47

HECM LIBOR 275: 6.72

HECM LIBOR 300: 6.97

Both the HECM Libor and the HECM CMT saw significant drops in Expected Rates this week and small declines in their APRs. Hopefully rates will continue to trend downwards.

This Week's Reverse Mortgage Rates: June 16, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning June 16, 2009.

APR:

HECM 300: 3.56

HECM 325: 3.81

HECM 350: 4.06

HECM LIBOR 250: 2.818

HECM LIBOR 275: 3.068

HECM LIBOR 300: 3.318

Expected Rates:

HECM 300: 6.89

HECM 325: 7.14

HECM 350: 7.39

HECM LIBOR 250: 6.72

HECM LIBOR 275: 6.97

HECM LIBOR 300: 7.22

While the expected rate of the HECM LIBOR fell this week, APRs continued to rise dramatically, following a pattern we’ve seen in recent weeks.

This Week's Reverse Mortgage Rates: June 9, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning June 9, 2009.

APR:

HECM 300: 3.50

HECM 325: 3.75

HECM 350: 4.00

HECM LIBOR 250: 2.821

HECM LIBOR 275: 3.071

HECM LIBOR 300: 3.321

Expected Rates:

HECM 300: 6.70

HECM 325: 6.95

HECM 350: 7.20

HECM LIBOR 250: 6.52

HECM LIBOR 275: 6.77

HECM LIBOR 300: 7.02

Both the expected rates and the APRs increased for the HECM CMT and the HECM LIBOR this week. Expected rates continued to rise sharply, continuing last week’s ascent.

Fannie Mae Will Discontinue CMT Based Reverse Mortgages in September

Fannie Mae announced yesterday that it will no longer buy CMT based reverse mortgages beginning September 1, 2009. This means that CMT based reverse mortgages are therefore much less likely to be offered starting on that date. While on the surface this might look problematic, most lenders and borrowers are already using LIBOR based products, which currently have lower interest rates than the CMT based products.

Fannie Mae said the reasoning behind the discontinuation of CMTs was to help standardize and simplify the HECM product offerings, build liquidity for the product, and move the market towards securitization. However, another likely factor is that the CMT is based on the US treasury bond, which has been plummeting in value recently due to the recession. The LIBOR, on the other hand, is based on the London Inter-Bank Offered Rate, which is an international index. As a result, it is arguably a more stable rate in the current economic climate, dependent on the international situation as opposed to only on the US.

Lenders will be able to continue to obtain pricing and commitments for CMT based HECMs from Fannie Mae until August 31, 2009.

This Week's Reverse Mortgage Rates: June 2, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning June 2, 2009.

APR:

HECM 300: 3.49

HECM 325: 3.74

HECM 350: 3.99

HECM LIBOR 250: 2.816

HECM LIBOR 275: 3.066

HECM LIBOR 300: 3.316

Expected Rates:

HECM 300: 6.59

HECM 325: 6.84

HECM 350: 7.09

HECM LIBOR 250: 6.29

HECM LIBOR 275: 6.54

HECM LIBOR 300: 6.79

Both the expected rates and the APRs increased for the HECM CMT and the HECM LIBOR this week. Expected rates have risen sharply.

Rising Mortgage Rates Increase Concerns About Housing Market

Wall Street Journal graph depicting the number of overdue mortgages and foreclosures versus the rising 30-year fixed mortgage rates

The Wall Street Journal announced today that mortgage rates have surged to their highest level in three years. The average rate on 30 year fixed rate forward mortgage was 5.44% on Thursday. But what is more remarkable is that the level jumped 7.6% from Tuesday, when the rate was just 5.03%. While forward mortgage rates are not directly related to the reverse mortgage rates, the same trend can be observed in the reverse mortgage rates. Between May 19th and May 27th, the rates for the 10-year CMT (which affects the HECM CMT programs) increased by 4.6%, while the rates for the 10-year LIBOR swap (which affects the HECM LIBOR programs) increased by 2.4%. If the forward mortgage data is any indication, next week’s reverse mortgage rates will be even higher.

The increasing mortgage rates in both markets are a cause for concern amongst those in the industry. For one, increasing mortgage rates will make homeowners less likely to buy a home. The Wall Street Journal reports that Credit Suisse estimates that each increase of .10 percentage point in mortgage rates is equivalent to a 1% rise in home prices. By their calculations, home prices would then have risen over 3% in two days (while home values have remained constant).

Increasing mortgage and reverse mortgage rates will also make it harder for borrowers to refinance and/or get out of foreclosure. They will lower the amount of money that can be saved by refinancing. These negative affects will not help a stuggling housing industry where, as reported yesterday, the number of homeowners behind on their mortgage or in foreclosure is already at record high levels.

This Week's Reverse Mortgage Rates: May 27, 2009

This week’s reverse mortgage rates are below. These rates are effective for the week beginning May 27, 2009.

APR:

HECM 300: 3.47

HECM 325: 3.72

HECM 350: 3.97

HECM LIBOR 250: 2.813

HECM LIBOR 275: 3.063

HECM LIBOR 300: 3.313

Expected Rates:

HECM 300: 6.29

HECM 325: 6.54

HECM 350: 6.79

HECM LIBOR 250: 5.84

HECM LIBOR 275: 6.09

HECM LIBOR 300: 6.34

Note that while APRs have declined for both the CMT and LIBOR this week, the expected rates have increased.